Study reveals ‘limited impact’ with user-centric streaming payouts

The study was conducted using data from music streaming platforms Spotify and Deezer. The report found that switching to a user-centric system, which compensates musicians according to the number of direct plays they get from users, would reduce the royalties paid out to the rightsholders of the top 10 artists by 17.2%, giving them 7.7% of the overall payouts rather than 9.3%.

This would lead to generally small percentage gains further down the hierarchy. Artists ranked between 11 and 100 would gain an average 1.3%. Those ranked from 101 to 1 000 would get a further 2.2%, and those between 1 001 and 10 000 and the top 10 000 will get an extra 0.5% and 5.2% respectively.

The impact of switching to UCPS would be at most a few euros a year, according to the findings.

“The move to UCPS could promote a redistribution of income for the benefit of artists, titles and aesthetics to the weakest audiences, but, if the percentages of change seem not insignificant, the amounts in value remain in reality limited,” a statement reads.

The study also suggests that a switch to the UCPS would lead to increased consumption for genres such as jazz, metal, blues and classical music, while streaming’s most listened-to categories like hip hop would experience declines.

Meanwhile, Deezer has been trying to launch a pilot of the UCPS for more than a year without success. To make an impact, the UCPM requires participation across the board, from labels, publishers, digital service providers, and performance rights organisations.

However, Spotify has been more welcoming of the UCPS. Commenting on the CNS study, a Spotify spokesperson said: “Spotify believes that artists and songwriters should have a voice in how the streaming economy operates. While initial research around a user-centric payment model is limited and doesn’t show the dramatic shift many thought it might, if artists and songwriters prefer this model, we support conducting additional research and will keep an open mind. Of course, any change in payment model is a decision that would need broad industry alignment to make happen.”

Universal Music UK CEO and chairperson David Joseph recently alluded to backing user-centric licensing and said that the model could help struggling artists.

Download the CNS study below (PDF).